Friday, July 4, 2008

Comment on the drying up of Auction Rate Securites

A brilliant comment on the drying up of the A-Rate Securities market:

"It’s the fire in the discotheque," said Peter Demirali, a vice president at Vineland, New Jersey-based Cumberland Advisors Inc., which has $1 billion of assets under management. “Everyone can’t get out all at the same time."

Paul Krugman terms the failure of this market as a 'modern version of bank run'.


Rritu

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